Knock Knock. Who's There? Mandriva

Mandriva Who?

December 15, 2005

To say that Mandriva has been quiet on the Linux front lately might just qualify as an understatement. The Paris-based Linux distribution company has had a rough road these last couple of years, having pulled themselves out of redressement judiciaire (the French equivalent of Chapter 11 bankruptcy in the US) in March 2004.

But now the company is back with a vengeance, and is more than willing to discuss its past, present, and future: a future that includes stepped-up presences in the enterprise server market and, geographically, nations where IT opportunity is much wider than in the US or EU.

More specifically, according to CEO Fran�ois Bancilhon, Mandriva is prepared to take its product line straight to Red Hat and Novell, in whatever arena the US companies care to compete--including, Bancilhon emphasized, right in their back yard.

Bancilhon has been making the rounds in the technology press recently, spreading the word that Mandriva is back and ready to make a big splash in the enterprise arena. This may seem odd at first, since on one level Mandriva has been very active. In July of 2004, the company made the seemingly innocuous acquisition of Edge IT, a seven-employee French IT consultancy firm. This acquisition might have seemed small, but in actuality, it could have been one of the biggest moves Mandriva could have made--possibly even bigger than the February, 2005 merger and acquisition with Brazilian distribution Conectiva.

So, given these moves, plus the resolution of the company's ongoing litigation with the Hearst Corporation (owners of the Mandrake the Magician trademark), how can it be said that Mandriva was running quiet? Because at the time, there was no sense of an overall plan coming out of the Paris offices. Announcements were made, but little indication was given of what direction Mandriva was planning to go.

That is clearly changing. Using the recent release of Mandriva Linux 2006-- the company's flagship desktop product--as a platform, Bancilhon candidly explained what the company now has in mind. In recent years, Mandriva's revenue model included retail sales, online sales, Mandriva Club memberships, and OEM revenue. Bancilhon emphasized that these sources of revenue will definitely continue, as the company has no desire to leave its original, core market.

In addition to this market, Bancilhon said, Mandriva has entered the large-scale corporate market through direct sales, support, and training services. To give an idea of just how much revenue will come from support, training, and other similar services, in the 2003-2004 fiscal year, Mandriva made about €400,000 [US$479,100] from support revenue (about 7.7 percent of total revenue). In 2004-2005, the company pulled in approximately €1.8 million [US$2.2 million] in the same channel (which was 33.1 percent of total revenue).

The transition from a straightforward software distro company to a large-scale full-service provider is a big part of Mandriva's emergence into the black, Bancilhon explained. Such a transition for a company of software engineers and self-described geeks would have been difficult, Bancilhon said, had it not been for the acquisition of Edge IT. This merger of cultures and skillsets was exactly what Mandriva needed to give itself the facelift to an enterprise provider. The Conectiva acquisition was what gave Mandriva the technical toolsets to sell to the enterprise market.

Bancilhon sees his company has being able to meet the needs of large-scale (1,000+ servers, 10,000+ desktops) companies. Mostly these migrations have been on the server level, using the Online Pro and Pulse administration tools to facilitate migrations and ease-of-use. Later, Bancilhon said, these companies have opted for a desktop migration.

Of late, however, Mandriva has seen companies that are jumping straight into the desktop. Bancilhon cited a European bank that Mandriva is currently working with to migrate 12,000 desktops. Governments, too, seem particularly interested in desktop-focused migration plans.

Mandriva has pushed hard into the North American market: in 2003-2004, 52 percent of their sales came from NA. Now, however, Mandriva plans to target other markets as well, particularly the Brazil, Russia, India, and China (BRIC) market. The BRIC market, which refers to second-tier IT markets between Western countries and developing nations, is widely regarded as a market with huge potential by many in the IT sector, and Mandriva is not going to miss the boat. The company has many ties in these regions (the acquisition of Conectiva didn't hurt here, either) and has even developed its main software line with BRIC nations in mind.

Bancilhon cited the recent release of Mandriva Linux 2006, which includes DeltaRPM, a package delivery tool that lets users download only the changed files within RPM packages. This is a real time saver in nations without the broadband capabilities such as those found in the EU and US. Mandriva also officially supports 70 languages, which certainly helps international sales.

Regionalism also plays a part of Mandriva's OEM agreement with HP. Currently, HP sells Mandriva-loaded machines in France and a few other areas. At one time, Mandriva's OEM agreement with HP was global, but the bankruptcy proceedings completely disrupted that arrangement. While then-Mandrakesoft was in recovery, HP went on to form exclusive OEM agreements with Red Hat and Novell. But, according to Bancilhon, HP would soon learn that while Red Hat and SUSE Linux went over well in some areas, they were not such a hit in others. HP turned to its regional managers and let them decide. Quite a few opted to form regional-level agreements with Mandriva.

Right now, Bancilhon describes two challenges to putting Mandriva on the enterprise map. One is a matter of perception: Mandriva's "absence" from the enterprise market gives it a bit of catching up to do with Red Hat and Novell. But clearly this who Mandriva wants to chase down, and he feels Mandriva can do a better job.

The second challenge is making the actual connections. Mandriva has relied heavily on direct sales, and would prefer to use resellers on the ground in their customers' markets. In Poland and the Czech Republic, Mandriva does have a strong relationship with two resellers now, and they are currently working to establish similar relationships in North Africa. Setting up resellers in the US and EU, however, is more problematic, Bancilhon explained, as these regions are much more geared to direct sales since they rarely import software.

Despite the challenges, Mandriva is ready to take its place on the commercial Linux stage and provide customers with even more Linux choice.